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Risk Taking Disciplined

Judge allows Citadel to sue 3 former employees

Judge allows Citadel to sue 3 former employees

By Christine Williamson
September 4, 2009, 6:21 PM ETCitadel Investment Group can move forward in its suit against three of its former employees to enforce non-compete, non-disclosure and non-solicitation agreements the trio signed when they joined the hedge fund manager.

Cook County Circuit Court Judge Mary K. Rochford in Chicago today denied a motion to dismiss the case filed by defendants Mikhail Malyshev, Jace Kohlmeier and Matthew Hinerfeld and their new trading firm, Teza Technologies.

Citadel filed suit in July seeking an injunction to prevent the three from violating employment agreements that preclude them from engaging in any business that competes with Citadel, using trade secrets and confidential information they gained at Citadel, and recruiting other Citadel employees to join Teza.

According to court documents, Messrs. Malyshev and Kohlmeier were investment managers in Citadel’s high-frequency trading group and Mr. Hinerfeld was an in-house attorney. They left the firm in February to start Teza.

“Our legal position has been vindicated by the court,” Adam C. Cooper, Citadel’s general counsel and senior managing director, said in an e-mail response to a request for comment. “As a factual matter, the defendants … have essentially conceded that they are engaging in precisely the same types of activity that are prohibited by their agreements with Citadel, as interpreted by the court. We look forward to the hearing at the end of the month,” he added.

The defendants could not be reached for comment; Chris C. Gair, a partner at the law firm of Jenner & Block who is representing Teza Technologies, did not return a call seeking comment.

Contact Christine Williamson at cwilliamson@pionline.com

September 9, 2009 - Posted by | Un-quant

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